Xenon Pharmaceuticals (NASDAQ: XENE) reported Q1 EPS of ($0.22), $0.10 better than the analyst estimate of ($0.32). Revenue for the quarter came in at $7.08 million versus the consensus estimate of $4.5 million.

First Quarter 2020 Financial Results

• Cash and cash equivalents and marketable securities as of March 31, 2020 were $229.7 million, compared to $141.4 million as of December 31, 2019. There were 34,956,272 common shares and 1,016,000 Series 1 Preferred Shares, which are convertible into common shares on a one-for-one basis at the option of the holder, subject to certain limitations, outstanding as of March 31, 2020.
• Based on current assumptions, which include fully supporting the planned clinical development of XEN1101, XEN496 and XEN007, Xenon anticipates having sufficient cash to fund operations into 2022, excluding any revenue generated from existing partnerships or potential new partnering arrangements.
• For the quarter ended March 31, 2020, Xenon reported total revenue of $7.1 million related to recognition of $5.8 million of deferred revenue as well as $1.2 million for research and development services from the license and collaboration agreement with Neurocrine Biosciences. There was no revenue recognized for the same period in 2019.
• Research and development expenses for the quarter ended March 31, 2020 were $11.8 million, compared to $9.1 million for the same period in 2019. The increase of $2.7 million was primarily attributable to increased spending on Xenon’s clinical development product candidates XEN496 and XEN1101, and, to a lesser extent, increased spending on pre-clinical, discovery and other internal program expenses. This was partially offset by decreased spending on XEN901, now known as NBI-921352, as clinical development costs are borne by Neurocrine Biosciences.
• General and administrative expenses for the quarter ended March 31, 2020 were $3.3 million, compared to $2.6 million for the same period in 2019. The increase of $0.7 million was primarily attributable to increased stock-based compensation expense, salaries and benefits, insurance premiums and business development expenses, partially offset by a decrease in legal fees for intellectual property protection.
• Other income for the quarter ended March 31, 2020 was $0.5 million, consistent with $0.5 million for the same period in 2019.
• Net loss for the quarter ended March 31, 2020 was $7.5 million, compared to $11.3 million for the same period in 2019. The change was primarily attributable to revenue recognized in the quarter ended March 31, 2020 pursuant to the agreement with Neurocrine Biosciences, partially offset by an increase in research and development and general and administrative expenses as compared to the same period in 2019.

Dr. Simon Pimstone, Xenon’s Chief Executive Officer, said, “Despite the global impacts of the COVID-19 pandemic, I am pleased to report exciting progress in both our proprietary and partnered neurology programs. Over the next 12 months, we anticipate a number of important clinical and regulatory milestone events from our pipeline of innovative epilepsy treatments, and we are fortunate to have the cash runway to support our business objectives.”

Dr. Pimstone continued, “Looking specifically at our proprietary epilepsy programs, we anticipate top-line data in the first half of 2021 from the XEN1101 Phase 2b “X-TOLE” clinical trial currently underway in adult focal epilepsy, and we continue to analyze other potential clinical indications for this novel Kv7 potassium channel modulator. Importantly, over the past few months, we have also made great strides in advancing XEN496, which is our proprietary pediatric formulation of ezogabine being developed for the treatment of KCNQ2 developmental and epileptic encephalopathy. A recently completed pharmacokinetic study testing XEN496 in healthy adult volunteers demonstrates that XEN496 has similar absorption and elimination curves as the historical data for immediate release ezogabine tablets. Building on this encouraging PK data, we have also received recent FDA feedback on our XEN496 program and believe we have all the necessary input to initiate a double-blind, placebo-controlled Phase 3 clinical trial in approximately 40 pediatric patients with KCNQ2-DEE later this year.”

Dr. Pimstone added, “I am proud that our partnered programs also continue to advance through development providing opportunities for milestone payments. Our collaborator, Neurocrine Biosciences, expects to file an IND in mid-2020 in order to start a Phase 2 clinical trial for NBI-921352 in SCN8A-DEE pediatric patients. In addition, Flexion Therapeutics recently announced positive pre-clinical data for FX301, a Nav1.7 inhibitor being developed in an injectable long acting formulation for control of post-operative pain, and advanced FX301 into GLP toxicology studies.”

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